Background

• Roman Chacon appealed a district-court grant of summary judgment for Ohio State Life Insurance Company (OSL) dismissing his breach-of-contract and insurance bad-faith claims as time-barred under New Mexico law.
• Chacon argued Arizona’s statute of limitations should apply, under which his claims are timely; he is a long-time Arizona resident who moved there at age ten.
• The district court applied New Mexico’s statute, N.M. Stat. § 37-1-10; Chacon urged application of Arizona’s Ariz. Rev. Stat. § 12-502.
• The Ninth Circuit reviewed choice-of-law de novo and noted that in diversity cases federal courts apply the forum state’s choice-of-law rules.
• Arizona follows the Restatement (Second) of Conflict of Laws § 142 for statutes-of-limitations conflicts; that rule generally applies the forum’s limitations period unless exceptional circumstances exist or the forum has no substantial interest.
• The Ninth Circuit concluded Arizona has a substantial interest (protecting minor residents’ ability to sue when they reach majority), OSL identified no exceptional circumstances, and therefore Arizona’s statute governs; the court reversed and remanded.

Issues

Key Cases Cited

• Erie R.R. Co. v. Tompkins, 304 U.S. 64 (federal courts must apply state substantive law in diversity)
• Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99 (outcome-determinative test for Erie principles)
• Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (choice-of-law reviewed de novo in Ninth Circuit)
• Abogados v. AT&T, Inc., 223 F.3d 932 (federal courts apply state choice-of-law rules in diversity cases)
• Jackson v. Chandler, 61 P.3d 17 (Ariz. decision adopting Restatement § 142 for statute-of-limitations conflicts)
• DeLoach v. Alfred, 960 P.2d 628 (explaining § 142’s rule and conjunctive factors under Arizona law)
• Hayes v. Cont’l Ins. Co., 872 P.2d 668 (Arizona interest in protecting residents’ access to common-law remedies)